The only difficulty with these charts is that they seem so obvious, it is hard to believe it could be so simple. Beginning with the daily SPY, we have come to an apex, both the one shown by the red and green lines and also from the undrawn line across 87 and the green line. On the move into new high ground Friday, the range narrowed, volume shrank, and the close was well off the highs but still in the upper half of the range. Since 3/23, four weeks ago we have moved up 5 points and the thrust has shortened again. We have many symptoms of absence of demand but no supply has kicked in. Now we are at an apex, so we may rightly expect action soon. I uploaded a chart of bgu to emphasize the low volume. Goldman's chart shows that at least one ot the old leaders looks tired, similarly with xlf.Let's imagine for a moment that much of this upmove which went nowhere for a month was distribution. If so when did it begin? It goes back at least to 3/25, 26 and perhaps a week earlier. This makes quite a bit of distribution and will become important should we be called on for a pnf count.
Let us turn to the hourly pnf. What makes this interesting is how rapidly it can expand should prices fall. For example look how large the count could be across the 80 line. In other words, if supply comes in, there is the possibility of a substantial decline that could easily test the lows. Much depends on the "if."
Turning to the hourly, it clearly shows where distribution might have begun on the 18th. Further it emphasizes the wedge and apex as well as the shortening of the thrust. It also shows that we have had no substantial down bars.
Finally please turn to the 5 min bar chat of Friday only. Observe that at 1,2,3 the down moves have more volume than the preceding upmoves. This the first selling pressure since 3/19 and 3/20 and is perhaps the beginning of the much awaited supply. At the apex, we are beginning to see supply.
